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Federal Reserve Governor Michelle Bowman on Friday again called on the central bank to engage an independent third party to analyze bank failures and stressed that these events should not be used as pretext to push for radical reforms to bank regulation.
“I believe the Fed should engage an independent third party to prepare a report to supplement the limited internal review to fully understand the failure of Silicon Valley Bank (OTC:SIVBQ),” said Bowman while addressing the Texas Bankers Association Annual Convention.
Bowman insisted that current regulation is enough to ensure resolution of issues. “Regulators already have a comprehensive toolkit at their disposal to encourage issue resolution, and frankly, we need to use those tools appropriately, not create more tools because we failed to use the tools at our disposal.”
Bowman accepted that there were some “clear lapses” in the supervision of SVB (OTC:SIVBQ), but remains confident that Fed supervisors will embrace the lessons learned from the recent bank failures.
“The banks that recently failed were unique in their operations and business models. These failures alone do not justify layering on inefficient and overly complex supervision on a broad range of other banks,” she concluded.
